Global oil demand growth is slowing at a faster pace than initially predicted, the newly released IEA Oil Market Report (OMR)
for September informs subscribers. For 2016, a gain of 1.3 mb/d is
expected – a downgrade of 0.1 mb/d on our previous forecast due to a
more pronounced 3Q16 slowdown. Momentum eases further to 1.2 mb/d in
2017 as underlying macroeconomic conditions remain uncertain.

Meanwhile world oil supplies fell by 0.3 mb/d in August, dragged
lower by non-OPEC. At 96.9 mb/d, global oil output was 0.3 mb/d below a
year ago, but near-record OPEC supply just about offset steep non-OPEC
declines. Non-OPEC supply is expected to return to growth in 2017 (+380
kb/d) following an anticipated 840 kb/d decline this year.

OPEC crude production edged up to 33.47 mb/d in August - testing
record rates as Middle East producers opened the taps. Kuwait and the
UAE hit their highest output ever and Iraq lifted supplies. Output from
Saudi Arabia held near a record, while Iran reached a post-sanctions
high. Overall OPEC supply stood 930 kb/d above a year ago.

The anaemic outlook for refining throughput extends further amid
downward revisions to our 2H16 forecast. Refinery runs in 2016 are set
to grow at the lowest rate in a decade.

OECD total inventories built by 32.5 mb in July to a fresh record of 3
111 mb. As refinery activities reached a summer peak, crude oil
inventories refused to decline until an exceptional storm-related draw
hit the US in late August....